When a nation wants to trade with the world, it has to follow some rules and regulations. Tariffs, levies, taxes, exchange rates, and other norms and laws apply to international trade. In a country, entrepreneurs and businesses adhere to the rules and regulations of the state to carry out economic and financial activities. Political economy studies the effects of laws and regulations on the economy.
The nature of political economy varies depending on the political philosophy of a nation. For instance, the United States' political philosophy adheres to capitalism, democracy, and a free market; in China, there is Confucianism, communism, and a centralized state; in Iran, there is a theocracy, Islamic socialism, and presidential democracy. Every country has its own economic and political philosophy. Global socio-economic, political, and security challenges arise when political philosophies are challenged based on prejudice, self-interest, and hegemony. Rationality means accepting political and economic diversity and leads a spontaneous order to decide international values and norms.
Let’s discuss the three major political philosophies prevailing in the world. Analyzing and understanding their nature can help us address future socio-economic, political, and security challenges more effectively.
The government of the United States consists of three distinct branches: legislative, executive, and judiciary. The Constitution is the supreme law that governs and vests the powers to Congress for legislation, the president to executive, and the judiciary to arbitrate. Apart from the government structure, the U.S. economy operates on the principle of a free market economy in consumer goods, services, and business, and a command economy in defense, health, and retirement benefits. It is a mixed economy with a capitalist and socialist orientation.
The Chinese state structure is centralized. The President enjoys more power in the Chinese political system. The Chinese Communist Party dominates all state institutions. It controls every government department, military force, court, and parliament. The structure of the state follows a hierarchy. The president is at the top, then the Chinese Communist Party, and the National People’s Congress at the bottom. There are seven most influential people at the core of the Communist Party, who make up the inner circle of the Political Bureau. The wider Political Bureau consists of eighteen members. Altogether, inner and wider circles hold the highest roles in the government, party, or military. Congress is the top governing body consisting of 3000 delegates with different political orientations. They supervise the government and write laws.
China has a socialist economy. It has a dominant state in the center with capitalism and private ownership. The Chinese government defines and manages the economy. It sets goals, strategies, and targets to be achieved.
Like the U.S., the Iranian government has three branches: the president, the legislature, and the judiciary. The visible difference lies in the fact that Iran is an Islamic theocracy. The supreme leader exercises the highest power. His power comes from both political and ideological sovereignty. The Constitution of Iran delineates the supreme leader to supervise Iran’s domestic and foreign policies. He is also the commander-in-chief of the armed forces and controls the Islamic Republic's intelligence and security operations. The Supreme Leader is nominated by the Council of Guardians. The president is the second highest rank in Iran. He is elected by the parliament. He is answerable to the supreme leader in his/her executive powers. The Iranian parliament is a unicameral legislative body. It is elected by the public through voting. It drafts legislation, ratifies international treaties, and approves the country's budget. The judiciary is a branch of Iran’s government.
The economic orientation of the Islamic Republic of Iran is structured around the Islamic economic development strategy after the
Islamic revolution. It tried to eliminate interest rates from the banking system. It demonstrated strong anti-market policies in the 1980s. After the Iran-Iraq war, the policies shifted towards pro-market and adopted a structural adjustment program designed by the World Bank and International Monetary Fund. Its founder advocated staunch support of property rights and the role of the private sector based on Shiite traditions.
Political, economic, and government orientations stem from the political philosophy of each country.
American Political Philosophy is based on three doctrines: natural rights, republicanism, and constitutionalism. Democracy is the foundation of the government, and Americans believe in the government of the people, by the people, for the people. Individual liberty and freedom are the core values. The recent debates revolve around the importance of free elections and a free press versus social and economic democracy and issues around women’s rights, civil liberties, economic justice, and overcoming racial discrimination.
Today, political philosophy influences the economy of the U.S. Owing to the failures of the market economy, the need for a strong government is being increasingly felt in the country. The U.S. is now a mixed economy. It works on the features of capitalism and socialism. A Mixed economy allows property rights and free economic transactions, whereas it also supports a strong government to achieve social aims and public goods.
Chinese political philosophy originates from the well-known Chinese political philosophy of Confucianism. This philosophy was put forward by the Chinese thinker Confucius. He talked about the government and the legitimacy of the ruler. According to his philosophy, the ruler must be virtuous. The people must do what the ruler does. This political philosophy believes that a morally upright ruler decides the moral character of the state. People are selfish and have relentless desires. A virtuous leader, they end up in chaos and disruption.
In recent history, Mao Zedong, after the revolution, followed the soviet development model. In the 1950s, the split between the Sino-Soviet Union led Mao to abandon Marxism-Leninism and develop Maoism. It is a Chinese interpretation of communism. It shifted to Market-Socialism under Deng Xiaoping’s leadership. The modern economic-political philosophy adheres to the constitution created in 1982. This constitution includes many civil rights: free speech, press, worship, the right to trial, and property. In practice, the constitution is not being followed.
Present-day Iran’s political structure is based on Velayat-e Faqih, or the rule of the Islamic jurist. According to its architect, Imam Khomeini, the government should adhere to sharia or Islamic law. An Islamic jurist oversees the country’s political structure to ensure that the government follows the Quran and Sharia. The rule of Islamic jurists stems from the belief that in the absence of Imam Mahdi – the Hidden Imam or the twelfth imam of the Shia faith – the government is supervised by the highest and most viruous of the clergy. Today, the concept of Khomeini’s philosophy has evolved as a system of government that combines the elements of Islamic theocracy and democracy.
In Islamic economic philosophy, property ownership has three categories: Absolute, Public, and Private. Absolute ownership belongs to God; public ownership is the ownership of all natural resources on the land, sea, and space belong to the general public; private ownership means things you earn through work. Wealth in Islam is not abundant; therefore, it must circulate among all strata of society. The world needs to revive the ideas of Classical liberalism. The priority must be on individual freedom. The principles of classical liberalism, such as freedom, spontaneous order, free market, and globalization, are needed at the global level, where conflicting political philosophies and orientations are present. It is paramount to understand the potential political and economic structures. Samuel P. Huntington's Clash of Civilizations envisions international relations based on cultural and civilizational fault lines. The rise of China and the proxy wars in the Middle East are indicators that the world is divided based on political and economic philosophies. The need of the hour is to revive classical liberal values such as spontaneous order, civil society, the rule of law, justice, private property, toleration, and free trade. There is no doubt that support for economic, political, and social freedom is spreading throughout the world. Spontaneous world order is the best solution to ensure the progress and development of humanity. It will only emerge when different political philosophies prevail freely in the world.
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